More Credit Means More Flexibility
Many people use credit cards to pay for emergency car repairs, medical or veterinary treatment or any number of unplanned expenses. Even if you have an emergency fund for these events, it is often more convenient to pay with a credit card than to access your savings account.
Less Credit Helps You Manage Debt
Carrying a small amount of credit puts a set limit on what you owe and helps keep debt manageable. Additionally, when you open many new accounts in a short period of time, credit score agencies may consider you to be a greater risk because more available credit creates an opportunity to accumulate debt.
Bottom Line
How much credit you should carry depends on how you use it. Having more available credit helps you plan for the unexpected, and regularly using no more than 60 percent of your available credit improves your credit-to-debt ratio and helps your credit score. However, if you have trouble managing finances, having less credit available will help you keep your debt manageable.
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